• by Wayne Friedman , David Goetzl  @dgoetzl, August 11, 2006

Sucked into the vortex of the slow-moving, weakly priced adult programming upfront, kids' TV programmers are finding similar TV advertising upfront troubles--few price increases, less overall advertising money, and marketers demanding more complicated multi-platform digital deals.

Estimates are that the $800 million kids' upfront market could be down perhaps as much as 6 percent to 10 percent--or $50 million to $80 million, according to media buying executives. Those executives also report this is one of the slowest kids' upfront markets ever.

"It's incredible. This is the second week in August, and the upfront isn't over yet," says Shelly Hirsch, the new CEO of Beacon Media Group LLC, a new NYC-based kids' media buying agency. "You can buy almost anything you want."

As the market dragged, at least one buyer contemplated buying several early-season weeks in the scatter market in order to run back-to-school and early-holiday-season ads.

"This was as late as it possibly could be," the buyer said of the glacial pace.

Media buyers say virtually all categories: Toys, food, theatrical, video games, DVDs--are spending less than last year.

"Certainly we did see (the market) down," says David Levy, president of sales and marketing at Turner Entertainment, who oversees Cartoon Network sales. "I believe two categories were key to that softness--and that was theatrical and the gaming business. [But] if those categories come back to where they were, I think you'll see growth in the kids' marketplace."

But that's not the market now, as even premium fourth-quarter inventory is available. Known as the "hard eight"--the big holiday eight-week sales period into Christmas--buyers are reporting availability of inventory in October and November.

Media buyer estimates are that the "hard eight" cost-per-thousand kid viewers prices are barely treading water. On average, that pricing is up just a few percentage points versus a year ago. For other periods, pricing is down--somewhat substantially.

Industry leaders Nickelodeon, which commands 50 percent of the gross rating points, and Cartoon Network, with a 25 percent share of the GRPs, say there is a different--more positive--story.

Jim Perry, senior vice president of advertising sales for Nickelodeon, said that although the big cable network was initially rebuffed for its high-pricing demands--some media buyers say as high as an eye-popping 17 percent--Nickelodeon still got "double digit increases" for virtually all of its clients in the hard eight weeks. For other periods, he says Nickelodeon grabbed average pricing hikes of 4 percent.

Media buyers say this wasn't the case: Nickelodeon, as well as Cartoon Network, got CPM increases in the 5 percent to 7 percent range for the "hard-eight." Cartoon Network's Levy wouldn't discuss pricing.

Still, even Nickelodeon's Perry admits there was some concern--as the weak adult programming market had a spillover effect on the kids' market:

"Once the adult programming market started, we were all lumped in together," he says. "The market pretty much moved together. There has been a little bit of pressure over the last two weeks [to sell inventory]. Our fourth quarter starts August 28." Perry says Nickelodeon closed its upfront activities yesterday.

Kids' network ad-selling executives argue that it now takes longer to implement complicated multi-tiered deals involving sponsorships, licensing, and emerging platforms.

"It's a much more intricate market than it's ever been and we're not going to see a two- or three-day upfront," says a top sales executive.

As an aside, Perry says Nickelodeon made tremendous gains in its adult-skewing advertising business versus a year ago, doubling its revenue. This is advertising--such as automotive, package goods, retail, and life insurance marketers--targeted to mothers who watch with their kids.

Unlike other reports, Perry says Nickelodeon's movie studio business climbed for the fourth quarter. DVD marketers, however, didn't buy as much, he says--instead preferring to seek out scatter opportunities.

Media sellers say the food category was predictably down, in light of concerns over child obesity issues. Although some companies are switching to healthier products, marketing dollars are not up to the same levels as in previous years.

Although there is a pullback, Perry says: "We are pleased with that. We are seeing food advertisers looking to create new messaging."

Another sell-side executive said marketers in the food category opted to hold back spending, although the dollars may have been redeployed in non-kids' programming.

The kids' upfront market, which once moved in February, now appears to be permanently headed for a mid-to-late summer conclusion, unless demand sees a precipitous spike.

There is the possibility that the kids' upfront market could be dissolved and move entirely to a scatter business. But the high demand for the "hard-eight" and buyers' need to lock in airtime then may prevent that.